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I'd just say this: our current business has sharply better cash flow than Matasano's did (Matasano also didn't require pre-payments, but it did work primarily with larger firms, where this business works exclusively with startups), and our business would not be possible with prepayment. I only see downsides to prepayment, and my bias is to assume the need for them comes from accepting clients you should be rejecting out of hand. But I concede that this may be a quirk of my own experience.



> our business would not be possible with prepayment

Not exactly sure how this is possible. Any mature business will split up a project into milestones. Whether payment is due at the beginning of a milestone or at the end, makes little difference to the business overall.

I prefer to charge new clients at the beginning of each milestone, starting work after they pay. Existing clients I'm happy to charge after the work is completed, because there's a working relationship there already.

Before I started doing this, I had payment issues several times a year. Since I started doing this, I haven't had a single payment concern and have never had to even think about it.


The problem is how to know which clients are trustworthy before the first project. For small shops, even one missed payment can mean a lot of trouble...




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